Wednesday, 20 October 2010 9:30 AM

World Bank Report Shows Growth in Solomon Islands

The World Bank's recent review of economies in East Asia and the Pacific Region indicates that Solomon Islands have recorded a strong growth of nearly 7 % on average per annum between 2003 through to 2008.

The report titled "Robust Recovery, Rising Risks," revealed however that in 2009 the economy experienced a contraction of 2%.

Speaking in a media conference today, Economics specialist Tobias Haque says the growth from 2003 to 2008 is very much due to the boom in the forestry sector and increase in aid flows.

But he attributes the 2.3% contraction the end of 2009 to the global financial crises.

Economic Growth for the Solomon Island's is expected to rise between 3 to 4 %, a rebound from last year's low of less than 1%.

The World Bank's economic specialist stressed the need for continued efforts to diversify the economy through improvements to the business environment.

A local economist, in response to the findings, told Solomon Times that such growth is to be expected.

"We are still in recovery, from the negative economic effects of the ethnic tension so I think it would be slightly misleading to term it as growth...I think the better term for it would be recovery."

The local economist said that a key characteristic of a country in recovery is strong growth in the first few quarters, followed by a slow down once the country reaches near normal economic output. "From than on you would notice a considerable slowing down of the countries economic growth."

The local economist said that for a country such as the Solomon Islands, the key to future growth lies in aggressive land reform. "We are underutilizing our resources because land is being locked up due to disputes, there is huge potential but we need to get resource owners involved."